What should I do if my company receives a statutory demand?

You must act immediately. A statutory demand is a serious legal document that can lead to your company being wound up and a liquidator appointed. Contact our statutory demand solicitors urgently to discuss your options for defending the demand.

Am I personally liable for the company's debts if it becomes insolvent?

Generally, a limited company's debts are separate from your personal finances. However, directors can become personally liable if they have given personal guarantees or are found guilty of wrongful trading or other breaches of their duties. We can provide wrongful trading advice to help you mitigate this risk.

What is the difference between voluntary liquidation and compulsory liquidation?

A Creditors' Voluntary Liquidation (CVL) is a process initiated by the company's directors when it is insolvent. Compulsory liquidation is forced upon a company by a creditor who has successfully applied to the court for a winding-up order. We provide legal advice for both scenarios.

Can you assist me in negotiating with the ATO?

Yes. If your company has significant tax debts, we can assist in negotiating a payment plan, which can provide crucial breathing space and prevent further enforcement action.

What are my duties as a director if my company is facing insolvency?

When your company is insolvent or at risk of insolvency, your primary duty shifts from shareholders to creditors. You must act to minimise the loss to creditors. We provide clear guidance on directors' duties in insolvency to ensure you remain compliant and avoid personal liability.

Can I rescue my business instead of liquidating it?

Yes, in many cases, business rescue is possible. Options such as administration or Small Business Restructuring (SBR) can enable a viable business to restructure and continue trading. Our team can help you explore all turnaround and restructuring options.

How can I protect myself from accusations of wrongful trading?

The key is to act responsibly and take professional advice as soon as you identify a risk of insolvency. Document your decisions, do not take on credit you know the company cannot repay, and prioritise creditors' interests. Our solicitors can provide specific wrongful trading advice tailored to your situation.

Insolvency & Liquidation Lawyers Sydney

Frequently asked questions

Insolvency & Liquidation

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Don't let financial uncertainty dictate your future. Contact our expert insolvency solicitors for a confidential, no-obligation discussion about your legal options.

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Why Choose Dormer Stanhope?

Specialist Expertise: Our team consists of dedicated insolvency law solicitors with a proven track record of advising directors and SMEs across New South Wales.

Solution-Oriented Approach: We focus on practical, commercially minded solutions, not just theoretical legal advice. Our goal is to find the best possible outcome for you and your business.

Rapid, Decisive Action: We understand the urgency of insolvency matters. Our firm is structured to provide immediate assistance when you need it most.

Director-Focused Advice: We specialise in advising directors on their duties and protecting their personal positions throughout the insolvency process.

Secure Your Position with Expert Legal Counsel

Engaging with expert insolvency solicitors ensures you are not navigating this complex area alone. The primary benefit is clarity and control. We empower you to make informed decisions that comply with the law and aim for the most favourable commercial resolution. With our support, you can confidently manage creditor relationships, understand your personal risk exposure, and pursue the right strategy for your company's circumstances.

The Challenge of Corporate Insolvency

Facing financial difficulty is one of the most stressful experiences a director can endure. The pressures from creditors, the threat of a winding-up application, and uncertainty about your legal obligations can be overwhelming. Making the wrong move or failing to act decisively can lead to serious consequences, including personal liability for company debts and accusations of breach of director duties.

Key challenges include:

Intensifying Creditor Pressure: Constant demands from suppliers, lenders, and the ATO can disrupt operations and make rational decision-making difficult.

Formal Legal Actions: Receiving a statutory demand or a winding-up application signals that time is critical and immediate legal defence is necessary.

Understanding Directors' Duties: When a company is at risk of insolvency, your duties as a director also shift towards protecting the interests of creditors. Navigating this change without expert advice is fraught with risk.

Risk of Personal Liability: The possibility of being held personally responsible for company debts through insolvent trading claims is a significant concern for directors of struggling businesses.

Navigating financial distress requires precise, expert legal advice. At Dormer Stanhope, our specialist insolvency solicitors provide authoritative guidance to company directors facing creditor pressure, cashflow challenges, and the risk of liquidation. We deliver practical solutions designed to protect your legal position and achieve the best possible outcome for your business.